Calgary's luxury market to continue sales in the spring

According to one of Canada's leading real estate agents in high-end real estate, glitters in Calgary's upscale real estate market will not attract the attention of many buyers this spring.

Sotheby's International Realty recently released its spring forecast for luxury markets in Calgary, Toronto, Vancouver and Montreal.

"In Canada, sales have declined in the first two months of this year," said Brad Henderson, President and Chief Executive Officer of Sotheby's International Realty Canada.

While all of the $ 1 million and more real estate markets face challenges in the coming spring, Calgary is facing the greatest number of challenges because its economy is based on the fact that it is a new economy. Energy continues to struggle, resulting in a high and persistent unemployment rate, particularly in high-paying occupations.

That said, Henderson adds that the luxury market is difficult to measure definitively because it is so small compared to other segments of the market.

"There were 62 shares over $ 1 million in January and February that traded in Calgary," he says. "And that represented a 33% decrease over last year compared to the same period last year.

By contrast, in 2018, 92 units were sold in January and February, driven by a positive vision of economic recovery earlier this year, he added.

"We found that in our year-end report of 2018, there was a lot of optimism about the price of oil, pipelines and the Olympic bid," he said. "And one by one, many of these things are gone or have been put on hold, so optimism has faded and we continue to see it this year."

Indeed, recent figures released by the Calgary Real Estate Commission since March indicate the continuation of slow home sales of $ 1 million or more over the previous year – 37 to 64.

Most deals are around the $ 1 million price range, says Henderson.

"With units over $ 4 million, there was only one sold in the first two months of this year, compared to zero sold in the same period in 2018" he says.

Henderson adds that even in a good year, sales of numbers in this ultra-high-end segment do not generally exceed 10.

Most of the luxury sales involved single-family homes, while three units worth $ 1 million or more were sold in January and February, down 67% from the previous year. The CREB figures for March indicate persistent sluggishness in the apartment sector, with no sales for the month for units of $ 1 million or more.

In comparison, the major markets have much larger sales. In the Greater Toronto Area, for example, 1,497 units were sold for the entire luxury segment, including 145 condominiums in February and January combined.

Nevertheless, given its small size, any sale in the Calgary luxury market is a positive sign.

"The good news overall is that properties are trading," says Henderson. Sales figures are significantly lower than those before the recession and the pace of trading will remain slow as long as the economy will remain on hold.

But the advantage is that high-end homeowners in the city will benefit from price selection and flexibility, adds Henderson.

"Of course, when the share of the offer is greater, buyers are much more in control."